Choosing a Payroll Provider Based on Price Alone? Here are Three Reasons to Think Again

Depending on how you are processing your payroll, chances are it’s not the easiest part of your job. Managing time sheets, calculating overtime and holidays, and keeping up with confusing local, state, and federal labor laws is time-consuming and stressful. Not to mention your other human resource responsibilities like recruiting, hiring, onboarding, benefits administration and performance management. (Frankly, we’re exhausted just thinking about it!)

But relief is on the way. You’re finally ready to streamline your payroll management and simplify your HR tasks with the help of an outsourced provider.

If you’re just getting started in your search for a payroll company it may be tempting to zero in on price. Maybe you’ve convinced yourself that outsourcing your payroll is a splurge so you need to pay the bare minimum. Maybe you’ve bought into the myth that choosing the most expensive provider guarantees you’ll get their undivided attention.

While there’s some truth to it, it’s not always as simple as “you get what you pay for.”

At the end of the day, you want to find a payroll partner that can live up to its promises to make your job easier. One that pays your staff (and the IRS) on time, understands your challenges, and simplifies your back-office.

Know What You’re Paying For

While price should not be your deciding factor, you need to know what you’re paying for. Some important questions to ask include:

  • What is included in each package?
  • What are the additional costs including set-up fees for your new account, fees for updating the employee database, or fees for tax filing and reporting.
  • Is your rate fixed or can it increase for maintenance and upgrades?
  • Do they charge a per-paycheck fee?
  • How does the payroll schedule you choose affect your price?

Price is what you pay. Value is what you get.

Warren Buffett

Sometimes value and price line up. Other times they don’t. Whatever you spend, it’s critical you get value when you outsource.

Customizable Reports

Make sure a payroll company’s software solution provides reports you actually need and that they are easy to access. Compile a list of the reports you run (or the data you’ve always wanted but can’t pull easily if you process your own payroll) and ask the rep to confirm these are available with their system. Having the information you need at your fingertips saves you precious time. You can’t put a price on that.

Ongoing Training and Support

So you have a great new payroll and HCM solution where your payroll practically runs itself. If you don’t have proper training it’s like having a hot new car with a manual transmission in your driveway and you can only drive automatic. Ask the payroll company how they will support you once you’ve signed a contract. How will they train you on the new system? (At Patrick Payroll we offer regular training webinars so clients can feel confident and get the most out of their payroll and HCM solution.)

Take a Test Drive

Don’t sign anything until you’ve had a chance to demo the system and meet with a live person. This helps you get a better understanding of the ease of use of the system and see if the features they’re offering meet your needs. It also allows you to make sure their team is a fit for you. This isn’t about just a product, but having a partner who understands your business and is invested in your success. (For more on the advantages of a smaller provider when it comes to customer service, read this post.)

In Your Corner

Payroll is likely the beginning of your HCM responsibilities. If you’re also looking to outsource some of your HCM tasks, check out our post on “What to Look for in an HCM Provider.”

Did you know we offer a free 30-minute consultation to learn more about your business and better understand how we can knock out your payroll and HCM challenges? Schedule yours today. (We promise to make that easy too!)